(The Center Square) – While a state lawmaker’s call for a freeze on property values could provide some semblance of relief for homeowners amid the COVID-19 economic downturn, it’s the municipalities setting the tax rates that can provide real help, an Austin economic policy group says.
“Freezing values doesn’t freeze tax rates, there’s a misperception that if value doesn’t go up, property taxes won’t go up,” Dale Craymer, president of the Texas Taxpayers and Research Association (TTARA), told The Center Square.
“Property tax is a two-front battle,” Craymer said. “One front is values. Tax rates are the other front, that’s when the actual size of the tax bill is determined, based on how much local jurisdictions want to raise the rates. If you focus on one and not the other, you can see your tax bill spiraling out of control.”
State Rep. Dan Flynn, R-Van, has written to Gov. Greg Abbott asking for the freeze, according to a report on cbsaustin.com.
The 2019 passage of SB 2 was meant to limit how much local governments can increase property taxes, essentially restricting the amount from 8 percent to 3.5 percent, except in cases of disasters, Craymer said.
“The reality is the only way to constrain property taxes is for jurisdictions to live with less money, or for them to get money elsewhere,” Craymer said.
“It’s possible that could be in the next round of [federal] coronavirus relief, and cities and counties should use that money to provide property tax relief to their constituents,” he added.
It’s incumbent on homeowners to remain vigilant when jurisdictions start setting rates later in the summer, Craymer said.
“Freezing values probably creates more problems than it solves,” Craymer said. By way of example, for a new construction home that was a vacant lot in 2019, it wouldn’t make financial sense; and for oil properties, basing those values on 2019 would be unreasonable given the drop in market prices this year.
In-person Appraisal Review Board hearings aren’t likely to resume for a while, Craymer said, but there is an effort to have a virtual meeting system in place within the next few weeks.